Navigant Research Blog

Dockless Systems Creating Better Business Case for E-Bike Sharing

Ryan Citron — February 20, 2018

Just as electric bicycle (e-bike) sales in the US have not been as robust as in Europe, e-bikesharing programs have been similarly slow to develop. However, a number of dockless e-bikeshare programs have recently been deployed in the US—removing major costs and user friction points traditionally associated with dock-based bikesharing.

Over the last several years, a combination of urbanization, city policy, and bicycle lane expansions have driven new growth in the global bikesharing industry. As a result, bikeshare companies have been raising enormous sums of money, particularly in Asia. Chinese bikesharing companies Mobike and Ofo have raised over $2 billion so far for their operations.

In comparison to conventional bikesharing, e-bikesharing is much newer and far less widespread—largely due to the higher associated costs and added complexities of recharging e-bikes (which is generally done by fleet teams). However, the business case and user experience for e-bikesharing is improving considerably through the advent of dockless sharing programs that avoid the need for expensive new infrastructure and can be provided without government subsidies (unlike dock-based systems that generally receive public funding). In terms of user costs and convenience, many public bikeshare programs mandate a day pass purchase with a price tag of $7 or more for a single ride and keep the bikes at special docking stations where the bikes must be returned. Conversely, dockless programs charge as low as $1 per half-hour rental and customers have the added convenience of dropping off their bicycle wherever they please when finished.

Major Dockless E-Bike Programs Being Deployed

In 2017, the first dockless e-bike share program was launched in the US from New York-based JUMP Bikes. The company’s program is currently available in San Francisco (roughly 250 e-bikes deployed) and Washington, DC (150 e-bikes), with plans to expand to other cities such as Sacramento, California and Providence, Rhode Island by the end of 2018. In early 2018, the company raised an additional $10 million in funding for its expansion plans (along with an original $7 million investment). JUMP is also partnering with Uber to provide San Francisco residents and visitors with the ability to rent JUMP e-bikes directly from the Uber app.

Dock-Based Programs Now at Risk

Dockless e-bikeshare companies are leveraging smartphone technology (which is used to unlock the e-bikes) and existing infrastructure (e.g., public bicycle racks, parking meters, etc.) to replace the expensive new docking infrastructure traditionally required for bikesharing programs. Additionally, improving lithium ion battery technology is resulting in e-bikes that have longer ranges, are lighter, lower in cost, and remarkably similar to traditional bicycles. Together, these trends are directly enabling e-bikes, which are generally more expensive than regular bicycles, to be increasingly used in sharing schemes. Dock-based programs (for any type of bicycle) are now facing a significant threat to their market share unless they can add more docking locations to match the convenience of dockless systems, keep their user fees competitive with dockless programs, and reduce their reliance on government subsidies.